WASHINGTON, D.C. – The Justice Department announced today that a federal court in Tampa, Florida has permanently barred a Sarasota man, Michael E. Best, from falsely promoting tax benefits in connection with the sale of a business venture or investment. The complaint in the case, filed in the U.S. District Court for the Middle District of Florida, alleges that Best participated in a scheme with an Oregon company, Alpha Telcom (Alpha), to sell pay telephones to customers, falsely advising customers that they could claim disabled-access federal income tax credits and depreciation deductions for the phones. The complaint alleges that proceeds from the customers’ initial purchase were used for the phone equipment as well as to pay “profits” to earlier customers.
According to the suit, Alpha filed for bankruptcy protection in 2001 after the Securities and Exchange Commission (SEC) notified it that the scheme constituted the sale of securities. The SEC successfully sued Alpha, and both Alpha and Best were assessed penalties for the unlawful sale of unregistered securities.
The court also ordered Best to give the Justice Department a list of the names, addresses, e-mail addresses, telephone numbers and Social Security numbers of all customers to whom he sold any Alpha Telcom products or services.
This case is part of a joint IRS-Justice Department initiative to stop tax-fraud promoters and fraudulent return preparers, which has resulted in injunctions against more than 160 promoters and preparers since 2001. Information about the initiative is available at http://www.usdoj.gov/tax/taxpress2006.htm. Information on the Justice Department’s Tax Division is available at http://www.usdoj.gov/tax/index.html.